This is a special guest blog by Dr Dirk Klee, Chief Operating Officer of UBS Wealth Management. Dirk Klee was the keynote speaker for the Swiss Innovation Summit 2017.
The world is changing. We’re living in interesting times. Technology and digitalization now permeates every aspect of our lives. We’re seeing shifts all around the world and the pace of change will only continue to accelerate.
Just to get an idea of the size of that impact in economic terms, according to PwC, global GDP could increase 14% by 2030, or $15.7 trillion, as a result of AI.
The financial services sector is expected to be one of the biggest gainers, alongside retail and healthcare.
We’re seeing increasing fintech influence in the wealth management industry, but we still have more work to do.
Fintech partnerships the way forward
A recent report by PwC found that fintech and Asset Wealth Management (AWM) firms are just beginning to come together, with only 30% engaging in partnerships.
The trend is to move towards cooperation instead of waiting to be disrupted by fintech firms.
Technology is changing the way all business is done and the way financial services are delivered.
Watch video — A Sneak Peak Into Fintech Future and Competitive Innovation with Dirk Klee and UBS! / Episode 93
I believe that one of the key drivers of change, something that is already transforming the world we live in, is the rise of the platform economy.
We’re seeing clear evidence of platform domination, especially in Asia, where digital platform companies are leapfrogging more traditional models.
To highlight one example, the Chinese company Alibaba Singles’ Day promotion earlier this month generated a record $25 billion in sales – up by 40% on last year.
And we can also currently observe how these business, technological and regulatory evolutions are accelerating the commoditization of core WM services – but they will also create new opportunities.
The potential of open platforms
Down the road, the wealth management industry is potentially going to evolve into a disintermediated, open platform model.
Platform business models already dominate the global economy and continue to integrate financial services.
To give our clients the best possible service, innovation and digitalization have to be key priorities.
We need to do more than simply build new technology, we need to refit legacy platforms, build added value services and support our clients to make truly valuable connections around the globe.
These “client-centric” platforms will increasingly influence client expectations toward holistic outcomes which requires rethinking of a bank’s vision, value proposition and strategy.
Humans’ accessibility and efficacy will be amplified by “Smart Assistants”, requiring us to rethink ‘advice’.
Clients now look to wealth managers not only for investment excellence, but also for networking expertise, the ability to connect people, and finally, great minds. Digital platforms allow us to do all of this even better than before.
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